Bubbles, crises, and policy

In many recent cases financial liberalization has led to a bubblein asset prices. The bursting of the bubble results in a bankingcrisis and recession. It is suggested such bubbles are causedby an interaction of the risk-shifting problem arising fromagency relationships in intermediaries and uncertainty concerningthe expansion of credit. Two important policy objectives areidentified. The first is the prevention of bubbles in assetprices. The second is minimizing the impact of spillovers onto the real economy during post-bubble banking crises. The differentpolicy approaches taken in Norway and Japan are compared.     

Change, consolidation, and competition in health care markets.

The health care industry is being transformed. Large firms are merging and acquiring other firms. Alliances and contractual relations between players in this market are shifting rapidly. Within the next few years, many markets are predicted to be dominated by a few large firms. Antitrust enforcement authorities like the Department of Justice and the Federal Trade Commission, as well as courts and legislators at both the federal and state levels, are struggling with the implications of these changes for the nature and consequences of competition in health care markets. In this paper we summarize the nature of the changes in the structure of the health care industry. We focus on the markets for health insurance, hospital services, and physician services. We then discuss the potential implications of the restructuring of the health care industry for competition, efficiency, and public policy. As will become apparent, this area offers a number of intriguing questions for inquisitive researchers.     

Efficiency Considerations in the Additive Hazards Model with Current Status Data

For current status data, L IN , O AKES and Y ing (1998) proposed a procedure for estimation of the regression parameters in the additive hazards model that makes clever use of martingale theory. However, one of the outstanding problems posed in the paper was the issue of efficient estimation, as their estimators do not attain the semiparametric information bound. In this paper, we explore this issue and provide a characterization of the NPMLE. We conduct efficiency comparisons between the NPMLE and the procedure of L IN et al . (1998) analytically and numerically through analysis of a dataset from a tumorigenicity experiment.     

Beer Taxation and Alcohol-Related Traffic Fatalities

Most studies of alcohol-related traffic fatalities find beer taxes to be an important policy variable. This is surprising since beer taxes only have a small impact on consumption and heavy drinkers are the least responsive to prices. This study shows that the tax relationship is not robust across data periods and that it reflects missing variable biases. While lack of control for law enforcement effort does not appear to bias tax coefficients, failure to include determinants of alcohol consumption other than taxes and drinking age and/or factors that simultaneously determine drinking behavior and political support for alcohol taxes apparently do.     

Paternalism, Limited Paternalism and the Pontius Pilate Plight When Researching Children

Recognizing the immense purchasing power of children, marketing researchers often gather information from them. Given the vulnerability of these children as research subjects, this paper explores the different ethical standards that marketing researchers could adopt in their research efforts. The Paternalistic Ethical Standard and the Limited Paternalistic Ethical Standard are discussed and the ethical quandary known as the Pontius Pilate Plight is identified in the context of the latter standard. An enhanced version of the Limited Paternalistic Standard is suggested as an ethical guide for marketing researchers. Based on interviews with professional marketing researchers to gauge the applicability of the proposed standard, managerial implications are identified.     

Japan's slow-down: monetary versus real explanations

Two kinds of view about the recent stagnation of the Japaneseeconomy have been particularly popular. The first adopts a 'monetary'perspective, arguing that Japan has fallen into a liquiditytrap from which only unconventional monetary policy can saveit. The second maintains that a large part of Japan's macroeconomicdifficulties is structural and related to problems in the 'real'side of the economy. We argue here that it is hard to justifya neat division between these real and monetary problems. Decliningexpectations of future productivity may have depressed realinterest rates and reduced monetary policy flexibility, butthey are also likely to have prompted real responses that havecontributed to stagnation. In the long run, the conclusionsof the two kinds of diagnosis are complementary, but in theshort term tension may exist, with loose monetary policy weakeningincentives for structural reform, and structural adjustmentexacerbating demand deficiency.     

Implications of Economic Interdependence for Endogenous Wage Indexation Decisions

This paper shows how economic interdependence affects the indexation decisions of atomistic wage setters in an environment in which monetary authorities do not observe stochastic disturbances before making their policy choices. If stochastic disturbances are common across countries, interdependence has no effect on equilibrium indexation choices in identical countries. However, if disturbances are country specific, numerical simulations show that interdependence is likely to reduce equilibrium indexation choices relative to a small open economy. We also show that indexation choices may be either strategic complements or strategic substitutes, but that strategic complementarity becomes more likely as the degree of interdependence rises.     

Perspectives for long-term energy policy

After a review of the basic questions facing energy-policy makers and the inability of such techniques as cost-benefit analysis and demand forecasting to provide long-term answers, the authors focus on the supply approach. They argue that energy resources can, for practical purposes, be regarded as infinite and that the focus of attention should be the speed at which energy supplies can be brought on stream using various technology options and assuming an ideal world. A possible model, employing energy analysis, is described and its utility in providing benchmarks for long-term policy making is strongly commended.